Preface / Voorwoord

• Author: J.J. Henning
• Pages: V-
• Published date: 01 January 2010
• Date: 01 January 2010
• DOI: 10.10520/EJC74120

PREFACE / vOORWOORD

The raison d’être of the Close Corporations Act 69 of 1984 is the

provision of a simple, deregulated, decriminalized, inexpensive

and flexible free standing limited liability vehicle for the single en-

trepreneur or small number of participants, to meet his/her or their

reasonable needs and expectations without burdening him/her or

them with legal requirements that would not be meaningful in the

circumstances.

The eventual and primary impact of the present prolonged South Af-

rican company law reform process and particularly the Companies

Act, 2008 on the South African close corporation may be highlighted

as follows:

First, the proscription of new close corporations. This will not only

translate into the phasing out of close corporations, however gradual,

but will leave small entrepreneurs with only one avenue for new in-

corporations and that is under the Companies Act, 2008. The modus

operandi is patently obvious: ‘Out with the old in with the new’.

Second, there is the clearly discernible tendency to subject the close

corporation to more and more onerous administrative duties and ar-

rangements. This impact is significantly added to by the approach,

to supplant numerous arrangements in the Close Corporations Act

by that of the Companies Act, 2008 by repealing the first and incor-

porating large tracts of the latter by reference, thus encumbing it by

duties and obligations contrary to its very nature and fundamental

design philosophy.

However, especially if the present discriminatory approach is per-

sisted with, it will perhaps not be inopportune to bid the South Afri-

can close corporation as originally conceived adieu.

Prof J J Henning

Bloemfontein

June 2010

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